Advanced Micro Devices, Inc.
) recently announced the appointment of Devinder Kumar as the new
chief financial officer (CFO).
The new CFO has been associated with AMD for the past 28 years
and has served in the capacity of corporate controller over the
past 12 years. He was appointed interim CFO four months
back. According to a document filed with the Securities and
Exchange Commission, Kumar will now be entitled to a one-time
cash bonus of $125,000 and various stock option grants.
Like other companies in the PC business, AMD has also been hit
by the slump in demand due to the growing popularity of
smartphones and tablets and other mobile devices. AMD's chief
executive, Rory Read, showed his confidence in Kumar and stated
that the new CFO will play an important role in driving the new
business model in the near term and strengthening AMD's long-term
financial foundation. Management believes that Kumar will add
value to its growth strategy and boost its balance sheet.
The company has been laying off engineers while looking for
new markets for its chips as it faces falling cash reserves. In
October, AMD announced its plans to eliminate 15% of its
workforce. Last month, it announced its intention to sell its
58-acre Austin campus in order to raise $150 to $200 million from
AMD is the world's second largest maker of microprocessors but
it has been losing ground to its larger rival,
). The company reported a very poor third quarter, with a
significant net loss that was the combined effect of weak demand,
an inventory write-down and productivity issues. The company's
third-quarter sales of $1.27 billion were down 10.2% sequentially
and also below the consensus estimate of $1.28 billion.
In order to stay ahead of rivals like Intel and
), we believe that top management needs to execute its plans well
and come up with new ideas to generate more resources to invest
into newer business areas, site consolidations and
Internet-related opportunities (mainly cloud computing).
Advanced Micro is expected to release its fourth-quarter 2012
results on January 22, 2013.
Currently, Advanced Micro has a Zacks #3 Rank (Hold).
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